Today's Economic Data Highlights

The pace picks up, but only a bit, as we get import prices, the beige book, and the December budget balance following this morning’s mortgage applications report…New POMO schedule released today.

The Mortgage Bankers Association’s index of mortgage applications rose 2.2% in the first full week of 2011, but this was due to more refinancing (up 4.9%). The purchase loan index fell 3.7%.

8:30: Import/export price indexes for Dec….another large increase? Analysts estimate that the import price index rose by another large amount last month as crude oil prices continued to climb. Prices of nonpetroleum imports also rise significantly in November (+0.7% on the month).Median forecast (of 50): +1.2%, ranging from +0.4% to +2.0%; last +1.3%.

14:00: The US budget balance for Dec…slightly better than a year ago, once corrected for calendar quirks. The CBO estimates that the US Treasury ran a $80n deficit in December, $12bn less than in December 2009 and $35bn less when special calendar effects are taken into account.CBO -$80bn; median forecast (of 30) -$80bn, ranging from -$95bn to -$60bn; last (Dec 2009): -$91.4bn

Dollar up/Oil up befuddles me. The only excuse I can come up with is Euro down and TAPS broken, which sounds reasonable. The Brent/WTI spread is getting excessive. I'm experimenting with drift plays on my testing account. Its almost as if the new rule with WTI/Brent is for every 5 points up in Brent, you get 4 points up in WTI, while for every 5 points down in WTI you get 4 points down in Brent. Rough numbers of course, but very interesting nonetheless, and definitely exploitable.